What is black money ?
There is difference between black money and untaxed money. A difference that only a few are aware of. Black money is the amount of money that has escaped the borders of the country and which is not going to come back. The amount has been reduced from the GDP level. Like exporting and not repatriating the income. Holding the income in foreign land and converting the receipt into gold or other asset. Untaxed money is the money which the govt couldn't collect tax on. This money is still in the economy FYI and is making more money. An entire cash industry is working, people are employed sale is effected and production go underway. What is harmful?
When should you not invest in fixed deposits?
FD has low return compared to other investments but has very minute level of risk compared to other investment. The basic measure of taking an investment decision is the inflation rate. The rate at which your money is loosing value or you need more money than before to satisfy the same level of consumption. In this case the consumption cost increases. To counter this the investment return should be higher than the inflation cost. If your fixed deposit rate is 5% and the inflation is 6% then your money is actually decreasing at 1%
One of my close friends bagged a huge contract for production and supply of bisleri water bottles from Bisleri. Under the tender he is suppose to install a plant, extract water from the bore well, purify it, mineralize it, package it and dispatch it to distributors. The financial feasibility analysis was done by my firm and considering the close ties I didn’t charge him a single penny. As a show of gratitude he gave me 3boxes Bisleri water bottles. Please journalize the transactions giving proper justification wherever required.
The question touches one of the most basic and fundamental concept of accountancy. Money. The question isn't difficult if you have a thorough clarity of accountancy principles and concepts. If the principles are solid in your head this will be just plain stupid to you. The concept of passing a transaction in the books very importantly depends on money. Any transactions that can be measured in terms of money can be passed in the books otherwise they cant. Do you find money being exchanged? Thus this transaction cannot be recorded in the books.